Purchasing Power Disparity Faced by African Americans: Emphasis on Albany Metropolitan Statistical Area of Southwest Georgia

Abstract

The study highlights the critical purchasing power disparity (gap) and its applicable solutions in the Albany Metropolitan Statistical Area (Albany MSA). This disparity explains a high level of poverty among African Americans in the MSA. With an improved education, the article encourages minority businesses partnerships and entrepreneurship, and microfinancing to enhance minority capital formation. These have been proven to have a spread effect in reducing poverty and purchasing power disparity.

KEYWORDS:

• poverty
• purchasing power disparity
• economic discrimination
• incarceration ratio
• program incomes
• human capita
• minority entrepreneurship
• restricted economy
• microfinancing

Notes

1. This empirical information comes from the purchasing power data provided by the Selig Center for Economic Growth (2009).

2. Dougherty County School System (2010) provided the City of Albany/Dougherty County high school graduation and dropout rates as 57.44% and 6.39%, respectively.

3. In 2005, the variation in the economy caused Black unemployment rates of 7.4% for some-college graduates and 3.5% for college graduate. The respective statistics contrasts with White unemployment rates of 3.6% for some-college and 2.2% for college graduates in the same period. Because the low income group has a higher MPC, the Black group is likely to have a substantial decline of consumption with a small decrease in incomes.

4. A situation as discussed in Garofalo and Malhotra (1984) where capital substitutes labor could lead to Black labor being substituted by capital if this reduces cost, and employer harbors conviction discriminatory practices.